Audit of Civilian Leave Administration

Consistency Between Departmental and Central Agency Reference Materials

Departmentally issued directives and guidance must be consistent with the terms stated in collective agreements and authoritative sources issued by central agencies in order to avoid grievances and improperly authorized leave.

The Department has issued a Leave Administration Guide (LAG) aimed to provide managers and supervisors with additional guidance related to leave administration. Based on our review, we found this guide to be consistent with central agency reference material, including TB policies on leave, terms and conditions of employment and the 19 collective agreements that govern leave administration in the Department.

Training and Guidance Provided to Stakeholders

The key players involved in the leave administration process include compensation advisors, managers and supervisors. Various resources are available to these individuals, such as the departmental LAG and an online training course on LSS and HRMS called User Productivity Kit. These resources provide clarification and guidance on leave matters. There is a need, however, to increase awareness of these tools, as only 65 percent of questionnaire respondents were aware of the existence of the LAG.

The Department’s Instrument of Delegation of Labour Relations Authorities provides a clear picture of accountabilities and roles and responsibilities relating to leave administration. It documents the level of delegated authority required for approval of each leave type. This document is referenced within the LAG. However, 54 percent of respondents were not entirely confident they fully understood their delegated authorities with respect to leave. This suggests that increased awareness of the delegation document is warranted.

The Instrument of Delegation of Labour Relations Authorities states that “Level 6 & 7^[1] managers and supervisors may exercise the authorities delegated to them, after completing the training for delegated managers and provided that their Level 3^[2] manager has authorized them to do so, in writing.” The Department requires level 6 & 7 managers/supervisors to enrol in the “Delegation of Authorities: Labour Relations” course prior to approving leave. However, there is currently no mechanism to confirm this requirement is met. Moreover, there are no central or regional records of managers and supervisors with delegated authority to approve leave. This makes it difficult to ensure all leave transactions are approved by a properly authorized individual.

HRMS is a common system used by 14 departments within the Government of Canada (GoC). Employees who have access to a Defence Wide Area Network (DWAN) account enter requests for paid leave via the LSS module of HRMS. Their supervisor approves (or denies) the leave, also using LSS, and the transaction and resulting leave balance are recorded in HRMS. Employees who do not have a DWAN account or who would like to request unpaid leave are required to submit a leave request using a paper form. Once the requests are approved, the regional Human Resource Service Center (HRSC) staff enter these paper‑based transactions into HRMS.

LSS Controls

Based on the results of the web questionnaire, 87 percent of respondents agreed that implementation of LSS during FY 2008/09 has improved the overall leave administration and approval process.

The LSS module includes many edit checks. These include controls to ensure:

• All mandatory fields are completed;
• Leave is not for the prior fiscal year; and
• Requests for vacation or one‑time leave do not exceed the employee’s available balance or entitlement.

In addition, the LSS module provides a warning to both the employee and the authorizing supervisor if a request for Family‑Related, Volunteer, Personal or Sick Leave exceeds the employee’s entitlement or leave balance.

LSS provides employees and their supervisors with real-time access to leave balances for monitoring purposes. Prior to LSS, employees or supervisors had to keep independent records of leave taken to ensure annual entitlements and overall balances were not exceeded.

Areas for Improvement: HRMS System Controls

While the introduction of LSS has improved controls associated with leave, certain enhancements could be made. Prior to the audit, ADM(HR-Civ) staff had identified and prioritized 41 known issues and potential improvements to HRMS. Based on audit sampling, CRS concurs with the identified issues and noted that some of the documented issues can lead to inappropriately authorized leave and erroneous leave balances. For example:

• LSS is not customized by collective agreement. Individuals can select a leave type which is not part of their collective agreement (for example, marriage leave);
• Users have the option to bypass LSS warnings and exceed entitlements for some types of leave including volunteer and personal leave; however, supervisors also receive a system warning when approving leave requests that exceed entitlements;
• LSS does not ensure the hours of leave taken are consistent with the “From” and “To” dates and does not include statutory holidays or days of rest;
• Any employee can be selected as the authorizing supervisor in LSS. Therefore, individuals can send their leave request to any person in the Department regardless of whether the person has the appropriate leave approving authority. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … …
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• For some leave types, including Injury on Duty, Family‑Related Marriage and Personal Marriage, HRMS allows more than one leave transaction for the same time period. This impacts employee leave entitlements, statistical reports and monitoring of trends.

The Department is aware of the identified system weaknesses; however, a resolution time or mitigating strategies have yet to be developed. The Department’s ability to make changes to LSS and HRMS is limited, given that the system is used by 14 departments and customization will potentially impact implementation of future system upgrades. In some cases, it may be more feasible to develop monitoring strategies to detect the occurrence of these exceptions rather than develop additional input controls through customization.

Paper-Based Leave Request Process

At the time of the audit, approximately 13 percent of departmental employees did not have access to a DWAN account for various reasons, such as employees being on secondment or long-term leave, or in a work environment without computer access. Paper forms are used to process leave requests in these situations. In addition, employees who wish to apply for unpaid leave must submit a paper‑based request to their supervisor for approval. The approved leave form must be forwarded and entered in HRMS at the regional HRSC.

Forty‑nine such paper‑based transactions from various HRSCs were selected for examination to ensure the transactions were recorded in a timely, complete and accurate fashion. Based on this sample:

• Sufficient supporting documentation had been retained for all selected transactions;
• The appropriate pay action was taken for all approved Leave Without Pay requests;
• 95 percent of leave forms were approved prior to leave being taken;
• 80 percent of requests for Leave Without Pay and Leave with Pay for Other Reasons contained the appropriate reference or explanation in the comment box; and
• All paper-based leave forms contained leave start and end dates and 95 percent included the leave submission and approval dates.

Areas for Improvement: Paper-based Process

In general, the paper‑based leave process places more administrative burden on the HRSCs. Employees are required to complete a generic GoC leave form (GC‑178), obtain approval from their supervisor or manager and submit it to the HRSC for entry into HRMS. There is a greater possibility of error because of the manual data entry process. In addition, timeliness and completeness of HRMS data can be affected.

Approving supervisors are not required to print their name on the leave form. Illegible signatures and the absence of a file with specimen signatures for individuals having specific delegated authority makes it difficult to confirm that the leave form has been approved by the appropriate individual.

Leave Approval and Recording

The leave provisions of the collective agreements are generally being respected. Certain collective agreements allow managers to grant leave with or without pay for purposes other than those specified in the agreements.  Based on responses to the web questionnaire administered as part of this audit, when this occurred, it was primarily to enhance work-life balance or to reward performance.

Annually, the Department provides the Treasury Board Secretariat with a summary of leave records for comparative purposes and for analyzing trends. Based on FY 2008/09 data, DND employees take on average the same amount of leave as employees in the 73 departments and agencies that form part of the Core Public Administration. However, for this type of analysis to be meaningful and reliable, it is important that all types of leave be accurately documented in HRMS.

It is currently difficult to assess the completeness of leave data in HRMS as some situations exist where leave is not formally recorded. Based on web questionnaire responses, respondents indicated that:

• 75 percent of alternate work arrangements (such as compressed work week, working from home, etc.) are documented. For the remaining 25 percent, additional documentation should be maintained for the Department to support whether absences from the workplace are leave or are part of an informal arrangement with the manager.
• Leaves with a limited annual entitlement and/or a carry‑forward balance (such as Vacation Leave, Sick Leave, Family‑Related Leave, etc.) are for the most part recorded in HRMS.
• Leave that is not limited within collective agreements (such as Examination Leave, Personnel Selection Leave) is often not recorded.

An accurate, complete record of leave taken is critical to the success of any monitoring program.

Departmental Leave Monitoring Processes

An appropriate monitoring process is important to ensure leave is approved and recorded consistently and processed appropriately. Leave monitoring can also be a valuable tool in monitoring the health and well‑being of the workforce. Leave is currently monitored at various levels within the Department, for various purposes.

All HRSCs complete year‑end monitoring to ensure Pending Leave Transactions, Leave Payouts and Leave Carryovers are appropriately actioned and reported. As well, HRSCs complete some monitoring of exceptions and trends. However, the extent of such monitoring is left to the discretion of the HRSCs and the focus varies by region depending on the perceived areas of risk. For example, at the time of the audit some regions were monitoring usage of Leave Code 699 (Leave with Pay – Other) or Sick Leave and determining trends with respect to the number of leave forms manually entered by leave administrators as opposed to those entered by LSS users.

At the unit level, managers and supervisors can monitor the individual leave records of employees using LSS, but they do not currently have the ability to produce real‑time consolidated leave reports for their staff using this system. Their requests for standard or customized reports must be forwarded through the regional HRSC.

The Department could benefit from a more consistent approach to trend and exception monitoring. Such an approach should increase efficiency and effectiveness by assigning roles and responsibilities, not only for monitoring but also for follow‑up when issues arise. For example, as part of the audit, HRSCs were forwarded details of some situations where individuals had taken leave which was not consistent with their collective agreement. In discussion, some HRSCs indicated that they were not sure of their role in clarifying or rectifying these situations.

Based on the audit questionnaire, 73 percent of respondents felt additional monitoring of leave is warranted to:

• Ensure equitable application of collective agreements and/or terms and conditions of employment;
• Gauge the continuing morale/health of the workforce; or
• Reduce the risk of abuse.

Interviewees also felt that current monitoring processes could be improved by:

• Increasing the availability of standard or periodic reports, and making the requesting process more user‑friendly;
• Developing additional options to consolidate information by employee classification or work unit; and
• Improving turnaround times for custom reports.

Completing an annual risk assessment relating to leave administration, and developing appropriate supporting policies and processes for monitoring and oversight, would give an appropriate focus to improving the administration of leave.

CRS Recommendation

1. ADM(HR-Civ) should create additional awareness of the training and guidance resources currently available to managers and supervisors and of the delegation requirements with respect to leave.

CRS Recommendation

2. Better mechanisms should be developed to ensure both LSS and paper‑based leave requests are approved in accordance with the Instrument of Delegation of Labour Relations Authorities.

CRS Recommendation

3. Strategies, including service‑level standards and resolution times, should be developed for resolving the identified HRMS control issues.

CRS Recommendation

4. The policy and processes for monitoring compliance with leave administration requirements should be reviewed and strengthened.

Criteria

• Leave Policy. A governance structure is in place to ensure leave administration is in compliance with legislative requirements, regulations, collective agreements and policies.
• Internal Controls. Control activities are effective in providing timely, complete and accurate leave information.
• Monitoring. Processes and reporting tools are in place to monitor leave administration so that areas of risk can be identified and mitigated.